EDITOR'S CHOICE -- SCOTT SUTTELL

CEOs see Ohio turning around as a place to do business

Blog Entry: May 02, 2012 1:56 PM | Author: SCOTT SUTTELL

CEOs like Ohio a whole lot more than they did a year ago, though the state still has a long way to go to win them over completely.

In the annual Best & Worst States Survey by Chief Executive magazine, Ohio ranked as the 35th-best state in which to do business, up from 41st a year ago. The gain of six positions was bested by only three other states: Louisiana (+14), Mississippi (+8) and West Virginia (+8).

For the 2012 survey, 650 CEOs from across the country evaluated the states on a broad range of issues, including regulations, tax policies, work force quality, educational resources, quality of living and infrastructure. The survey was conducted from Jan. 24 to Feb. 26, 2012.

The magazine's state-by-state evaluation had this to say about Ohio: “Public-pension ploy didn't work, but bellwether state is going business-friendly.” (I'll bet Gov. John Kasich will take that.)

For the eighth consecutive year, CEOs rated Texas as the best state in which to do business, followed by Florida, North Carolina, Tennessee and Indiana.

Not surprisingly, Chief Executive notes that “most of the states in the top 20 are also right-to-work states, as labor force flexibility is highly sought after when a business seeks a location.” It contends that “several economists, most notably Ohio University's Richard Vedder and Harvard's Robert Barro, have found that the economies in R-to-W areas grow faster than other states, have higher employment and attract more inward migration.”

The lowest-rated state was California, which CEOs says is the result of “its hostility to business, high state taxes and overly stringent regulations, which is driving investment, companies and jobs to other states.”

Other states in the bottom five are New York, Illinois, Massachusetts and Michigan.

Bank on it

U.S. Sen. Sherrod Brown gets some support in an unlikely place — the op-ed page of The Wall Street Journal — for his ideas on bank reform.

In a piece headlined, “How Big Banks Threaten Our Economy,” Warren Stephens, head of financial services firm Stephens Inc. in Little Rock, Ark., writes that the 2008 bank bailout with $700 billion in taxpayer money left the country with “Dodd-Frank's complex regulations and banks that are bigger than ever.”

The solution, he writes, “isn't to demand that the big banks plan for disaster — it's to take steps to prevent disaster. We need bank reform that addresses the root of the problem: Some banks are simply too big — for their own good, as well as that of investors, the economy and their customers.”

He offers several suggestions to address this problem, including a gradual reduction in the bank deposit cap to 5% from 10%. (Banks now are prohibited from holding more than 10% of all deposits in the United States. “Banking executives claim the 10% cap is too low; I believe it's too high,” Mr. Stephens writes.)

Congress should demand the breakup of banks that already exceed the 5% cap, he adds.

“There should be no "grandfathering" of banks that are already beyond the 5% cap. They should be required to shed divisions, branches or business lines,” according to Mr. Stephens. “Breaking up the banks would in all likelihood be positive for investors. Compare both the price-earnings ratio and tangible book value for the megabanks to those of smaller or regional banks, and you'll see that bigger isn't always better. Shareholders would be wise to take up this fight as efforts in Congress — led most notably by Sen. Sherrod Brown (D., Ohio)—have been fruitless thus far.”

Hijack situation

Let's stipulate that most of us don't know what it's like to be Amar'e Stoudemire. We're not elite athletes, we're not nearly 7 feet tall, and we don't have $100 million contracts.

But this New York Times story, which quotes a Cleveland Indians team psychologist, reinforces how we've all dealt with the same kind of frustration — albeit with better control in the end — that led the New York Knicks star to punch a fire extinguisher case after a loss to the Miami Heat. The moment of rage likely has ended his season. (Though the Heat were going to end it pretty soon, anyway.)

“The decision to punch a solid aluminum object inside a glass-and-metal case may be irrational, but the athlete who lashes out and punches something inanimate and injurious is rarely thinking rationally,” The Times says.

Charles Maher, a psychologist for the Indians and professor emeritus at Rutgers University in New Brunswick, N.J., offers a straightforward explanation for why these types of incidents happen to athletes.

“Their emotions hijack them,” he says.

In baseball, The Times notes, it's usually a wall that leads to a frustration-related injury, particularly by pitchers.

“When they come off the field, especially following a poor performance, they typically are left alone by teammates,” Dr. Maher tells the newspaper. “It is during this time period when their emotions can get the best of them.”

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